Kia Rides the 'Apple Car' Wave, Hits Record High Stock Price... Market Cap Surpasses 40 Trillion for the First Time

Surpassing 90,000 Won to Hit Record High
Target Price Raised to 110,000 Won on Earnings Expectations

[Asia Economy Reporter Song Hwajeong] Kia Motors surged continuously, surpassing 90,000 KRW and hitting an all-time intraday high, driven by expectations for Apple’s autonomous vehicle, the ‘Apple Car.’

As of 9:35 AM on the 20th, Kia was trading at 91,900 KRW, up 8,500 KRW (10.19%). Early in the trading session, Kia’s stock price soared to 99,500 KRW, marking a record high. The previous intraday record for Kia was 84,800 KRW, set on May 2, 2012. Kia’s stock price had also surged 16% the previous day.

With the intraday rise to 99,500 KRW, Kia’s market capitalization surpassed 40 trillion KRW for the first time. Previously, in February 1999, Kia underwent a 10-for-1 reverse stock split, reducing its capital from 378.7 billion KRW to 37.8 billion KRW, with a market cap of about 76 billion KRW at that time. This means the market cap has increased more than 500 times in 22 years.

Kia’s strong performance is attributed to expectations of producing the Apple Car. The stock price was boosted by forecasts that Kia will be responsible for Apple Car production, with Kia’s Georgia plant in the United States being the likely manufacturing site.

Junseong Kim, a researcher at Meritz Securities, said, “The formation of a Non-Tesla alliance, competing against Tesla which leads the market, has begun to advance, and in this process, the role and value of Hyundai Motor Group are expected to be continuously re-evaluated. Kia will focus more on purpose-built vehicles (PBV) rather than building its own brand, collaborating with big tech companies as a device supplier.” Earlier, Kia announced its mid-to-long-term strategy Plan S last year, focusing on electric vehicles, mobility solutions and services, and purpose-built vehicles (PBV). This year, alongside a company name change, Plan S has been fully launched. To materialize Plan S, Kia plans to release its first dedicated electric vehicle ‘CV’ this year and introduce seven dedicated electric vehicle models by 2027.

Improved earnings are also expected to support the stock price rise. Hanwha Investment & Securities forecasts Kia’s consolidated sales for this year to increase 11.8% year-on-year to 65.5 trillion KRW, with operating profit rising 115.4% to 3.61 trillion KRW. Dongha Kim, a researcher at Hanwha Investment & Securities, explained, “A rise in the sales proportion of high-value-added products such as recreational vehicles (RV), expansion of new car effects through the launch of the global volume model Sportage and electric vehicles (EV) based on Hyundai Motor Group’s dedicated electric platform E-GMP, and improved profitability of the India plant due to increased operating rates are expected to drive significant profit growth this year.”

Due to earnings expectations, target stock prices have also been raised. Korea Investment & Securities recently raised Kia’s target price to 110,000 KRW, while NH Investment & Securities and Samsung Securities set it at 100,000 KRW. Further target price increases are expected following the recent surge.

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.